Fitch Ratings on Wednesday put the United States’ credit rating on watch for a possible downgrade, raising the stakes as upgrade negotiations approach. debt ceiling America’s decisive moments.
Fitch put the country’s “AAA” rating on negative watch, ahead of a possible downgrade if lawmakers fail to increase the amount the Treasury can borrow before it runs out of money.
In 2011, during protracted negotiations over the debt ceiling, Standard & Poor’s downgraded the credit rating of the United States, but Fitch did not.
“It’s not entirely surprising given the mess in the debt ceiling negotiations,” said Tony Sycamore, an analyst at IG Markets in Sydney, Australia.
US President Joe Biden’s administration and Congressional Republicans have reached a dead end over raising the federal debt ceiling of $31.4 trillion, with both sides deeming the other’s proposals severely exaggerated.
Fitch said the rating could be downgraded if the United States did not raise or suspend the debt limit in a timely manner.
The agency expected an agreement to be reached, but said risks were increasing from the government’s failure to pay some of its obligations.
The Rating Watch indicates that there is an increased possibility of its change, and differs from the “Forward Outlook” which indicates a direction in which the rating is likely to move over a period of one or two years.